John, Terry, Bill, Kim and Zackhary are actors that met on the film set of a film they all
starred in. They became close friends during the production and decided to buy a large
house together in London to enable them to be close to London Film PLC studios. The
house is on 117 Bentley Drive, the sale price was £2.5 million, and payment was divided
between the friends. The conveyance was prepared without professional legal advice, and
the friends agreed that they would all own the house as joint tenants in both law and
equity.
John sold his house in Leeds and put the money from this towards Bentley Drive,
contributing 20% towards the purchase price.
Terry, whose parents are rather wealthy, contributes 40%.
Bill has recently inherited some money from a deceased aunt, but wishes to spend this
money on his acting career, and so acquires a mortgage from London Bank for his share of
20%.
Kim has been very lucky recently and won £1 million on a lottery ticket. They
contribute 20% to the purchase.
Zackhary used to work as a builder but has little in the way of savings and contributes nothing.
He says he will decorate the house and complete any renovations to make up for the
shortfall in his contribution to the purchase price.
Over the next few years the following events happened.
Jason, shortly after purchasing 117 Bentley Drive, is offered a very lucrative film contract in
Canada and wishes to recoup the money he has paid toward the house in order to
facilitate his move to Canada. John entered into negotiations with Steven about buying his
share of 117 Bentley Drive. Steven is unable to raise the necessary money so offers to pay
John a monthly rent to allow him to live in the house. John agrees to this and charges
Scott £700 per month to live in 117 Bentley Drive with the other owners.
Billy started to have an affair with Zack and initially the relationship was going well, but
then Bill found Zackhary in bed with another man and broke off the relationship. Bill could
not bear to be in the same house as Zackhary and, in a fit of rage, moved his belongings out
of the house and wrote a letter to the others saying he wanted to leave forever, not come
back and take his share in the property. He was so angry that he nailed the letter to the
front door.
Kim managed to get a film contract as a supporting actor and during filming, got
pregnant by the lead actor. Upon discovering this she made a will leaving everything she
owned on trust to her brother Daniel for the benefit of her child. Sadly, Kim was
diagnosed with a terminal disease and died shortly after childbirth. Her daughter Helen
lives with her father.
Terry’s acting career is not doing well, and she decides that she needs money as she has
exhausted her savings. She approaches Bill to see if he would buy her share of the
house. Billy is not interested at that time and politely declines
Later that year Zackhary finds out about Terry's offer to Bill. Zackhary decides to invest some money he has saved doing building work at the weekends. He approaches Terry to see if she is still willing to sell. The paperwork is drawn up and Zack purchases Trini’s share.
Part A
Explain the devolution of the legal and equitable interests for each named party in 117
Bentley Drive. You must explain and discuss both the legal and equitable position as a result
of each event and confirm the final position.
(80 marks)
Part B
London Bank has approached your law firm to seek advice about their position regarding
the mortgage as they are very concerned that Bill has stopped paying the monthly
instalments.
Write a letter to London Bank advising them of their legal position and suggesting a suitable
remedy that they could seek.
(20 marks)